MercoPress. South Atlantic News Agency

OPEC to boost production 5 million bpd …by 2012

The Organization of Petroleum Exporting Countries, OPEC plans to boost its oil production target capacity by 5 million barrels a day by 2012, the organization's secretary-general said Tuesday in Rome.

Abdalla Salem el-Badri speaking on the sidelines of the International Energy Forum said that members of OPEC are planning to spend 160 billion US dollars over the next four years to boost production capacity. OPEC crude oil production is expected to average 32.3 million barrels per day during the first quarter of this year, according to the most recent forecast from the US Energy Information Administration. El-Badri also said that supply and demand issues were being discussed at the energy forum in Rome, but that he didn't expect any agreement on whether prices are too high or too low. Oil prices rose to all-time high above 118 US dollars a barrel on Tuesday on concerns over supplies from some key producers such as Nigeria where rebels blew up a pipeline forcing Shell to cut production by 169.000 bpd. El-Badri blamed a weak dollar and speculators for soaring oil prices, which are taking a heavy toll on economies worldwide. He said OPEC members were investing to increase both production and refining capacity. "Right now, we have 120 projects worth 160 billion just to increase capacity by 5 million to 2012," he said, referring to production. He also said that OPEC members plan to invest about 50 billion US dollars to boost refining capacity by about 3 million barrels a day. OPEC's Secretary General also said that production costs had risen by 50/60% in the last few years as a result of wage and equipment costs inflation. He also revealed that the cartel had excess capacity of about three million barrels per day. Acting Deputy Secretary of Energy Jeffrey Kupfer speaking with reporters at the forum in Rome said that "oil prices are clearly too high". Asked if OPEC should boost production, Kupfer replied that the group "should take a look at ensuring sufficient supply in the market. Market fundamentals are tight and we do think it's important to keep the market well-supplied.